Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which closed last week on a downward trend, have increased by $3/mt since last Friday, starting the current week at $83.3-83.7/mt CFR China. As of January 9, inventory of iron ore at 33 major Chinese ports amounted to 102.55 million mt, up 4.03 million mt or 0.41 percent compared to the inventory level recorded on January 2, as announced by China's Xinhua News Agency.
The initiation last week of further investigations in relation to intermediate frequency melting furnaces in China has contributed to the upward movement of steel prices in the domestic spot market, in providing support for prices of steelmaking raw materials. As a result, despite the 11 percent decline in global coal prices, iron ore prices have increased by two percent over the past week. Meanwhile, a new pollution alert has been raised in China’s Hebei Province and is considered to be a signal for further production cuts, prompting increases in prices of steel and raw materials in the Chinese futures market. On the other hand, some market players state that the increases in the Chinese futures markets are just speculative. Also, Chinese buyers have started to restock iron ore ahead of the Chinese New Year holiday, and this situation has also provided support for increases in iron ore prices.
In the short term, iron ore prices will likely continue to fluctuate in line with the Chinese futures markets, and are not expected to record significant increases or declines.